India: The Tata Group, which acquired Air India nearly three years ago, has outlined its growth strategy, focusing on the distinct roles of its two carriers. With a fleet of around 300 aircraft, Air India will serve high-demand international and domestic markets, while Air India Express will focus on short-haul routes. As part of its Vihaan.AI transformation program, Air India placed orders for 470 aircraft from Airbus and Boeing in June 2023, aiming to modernize its fleet. This was followed by an additional order of 100 Airbus aircraft in December, bringing the total to 570.
Airbus Orders: 2023
Air India has placed orders for 250 Airbus aircraft, a combination of both twin-aisle and single-aisle models. This includes:
40=A350 Aircraft (twin-aisle), specifically designed for long-haul flights. The breakdown of this includes:
20=A350-900
20=A350-1000
The remaining 210 Airbus A320 Family aircraft (single-aisle), which includes:
140=A320neo
70=A321neo
Boeing Orders: 2023
Air India has also placed 220 Boeing aircraft orders, with a specific focus on bolstering its long-haul and single-aisle fleet. The Boeing order includes:
30=Twin-Aisle Aircraft to cater to long-haul routes:
20=B787 Dreamliners
10=B777X
The remaining 190 B737-8 Aircraft will help meet increasing demand for single-aisle flights within India and the surrounding regions.
Orders in 2024: A Continued Commitment to Expansion
In 2024, Air India continued to strengthen its order book, placing 100 additional aircraft orders. This includes:
10=A350 Aircraft (twin-aisle)
90=A320 Family Aircraft (single-aisle), ensuring Air India’s growth on both short-haul and medium-haul routes.
India-Hub Strategy: Strengthening Connectivity
Nipun Aggarwal, Chief Commercial Officer of Air India, emphasized the airline’s commitment to an integrated operation between Air India and Air India Express. He stated, “We are looking at it (Air India and Air India Express) as an integrated operation. Air India’s strategy is to focus on the hubs — Delhi, Mumbai, and Bengaluru.”
Air India aims to consolidate traffic from South East Asia, the Far East, and SAARC countries by aggregating passengers at these hubs before connecting them to long-haul and ultra-long-haul markets like Europe, the US, and Canada. This strategy will enable Air India’s hubs to compete with the well-established hubs of West Asia, such as Dubai, Abu Dhabi, and Doha.
Aggarwal told PTI, “We will focus on building strong corridors at our hubs and all other point-to-point opportunities.” The airline’s growing hub system is already playing a significant role in long-haul flights, with around 26 million passengers flying on these routes in FY24, generating $16 billion in revenue.
Dominating Long-Haul Markets
Air India’s India-hub strategy is built around the skewed flying patterns of international travelers. At least 76%, or 20 million passengers, on long-haul international flights were connecting via Air India’s hubs, with only 6 million opting for non-stop flights.
As Air India holds a monopoly on long-haul flights to Western Europe, Mainland US, and Canada, the airline’s market share in these routes stands at just 21%, or about 6 million passengers. However, as Aggarwal noted, “The 21% share in long-haul contributes more than 50% in revenue for Air India.”
A Fleet Expansion to Meet Growing Demand
Air India’s impressive fleet expansion strategy will be supported by the addition of 570 aircraft over the next 10 years, courtesy of Boeing and Airbus. Over the past three years, Air India has added 90 planes, including 50 narrow-body aircraft, 6 wide-body aircraft, and 45 leased planes.
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